1) Traditional media and the Internet

This historical similarity sheds light on imagining the future of the Internet, because we can understand the future by understanding the past. With just the first decade of the commercialized Internet behind us, the future holds plenty of growth like radio in 1920s and television in 1960s. How big might the Internet become? Current trends suggest that it may be bigger than all of traditional media. The Internet's growth parallels that of radio and TV, but it grows much faster; while it took more than 30 years for radio and TV to reach 50 percent of all U.S. households, it took less than 20 years for the Internet reached the same level.

In fact, the terms “wireless and “www” began appearing in ads 85 years ago, long before they became part of the everyday media lexicon. In 1920, RCA's logos and advertisements touted its own WWW - “World Wide Wireless” - with an image of the Earth coined with the words on the front of their annual report. Its emerging product was radio, or wireless telephony.

From 1899 until the end of World War I, radio was seen primarily as a communication tool to help guiding ships and relaying field orders, and it was after WWI that radio started to be a commercial application for home users. The first commercial radio broadcast came during the 1920 presidential election in the U.S. , when a Westinghouse office in Pittsburgh erected a makeshift radio station on its rooftop, and the local newspaper relayed election returns by telephone from its offices a few blocks away.

From 1921 to 1922, radio stations quickly grew from five to more than 575, and various new programs and music were beginning to take to the airwaves. Radio sets were selling as fast as they could be made, and listening to the radio was a trend. Events around the world could now be experienced as they happened. Just like the Internet 75 years later, people were free from constraints of time and space. And as people gathered around radio sets, advertisers scrambled to tell them about their soap, cigarettes, cosmetics and appliances.

The growth of the Internet shows many of the similar traits as early radio. While listenership soared into the mid-1920s, radio struggled to find a business model. By 1926, radio stations were failing at the rate of 15 percent per month. What finally made radio profitable was the emergence of the network and syndicated programs. The network allowed for linking scores of stations across the country, thus allowing for the placement of ads on the national level and radio's subsequent profitability. Syndication was another idea that flourished - the packaging and selling of content along with sponsoring advertising.

<AOL Time Warner vs. RCA>

Sicart (2000) has produced an interesting comparison between the behavior of the stock of RCA, the largest U.S. company in the radio business in the 1920s, and that of AOL Time Warner in the late 1990s and early 2000s.

The figure shows the similar fluctuation patterns of RCA and AOL; this graph shows a similarity in the commercial aspects of these two media as they developed during their early stages. 

 
top

 

 

2) Timeline of the Internet Advertising

1994

• Laurence Canter and Martha Siegel Legal Services spam the Internet.
• Only 12 percent of 280 top executives polled by Ad Age said their agency was equipped to help them market via the Internet.
• HotWired launches with the first banner ads on the Internet. Advertisers include AT&T, MCI, Sprint, Volvo and others.
• Time Warner opens Pathfinder service with ads from AT&T; Ziff Davis launches ZD Net on the Web.
• The NCSA Mosaic What's New Page on the Net says it's seeking sponsors.
• WebConnect advertising media kit is placed on the web.

<the first banner ad of AT&T >

(Source: AT&T, October 1994, one of the first Internet ads, on HotWired)

1995

• Five advertisers join Vibe Online, paying $40,000 for 6 months. Advertisers include: MCI, Saturn, Timex, Jim Bean, and AirWalk.
• Proctor & Gamble names Grey Interactive its interactive agency of record.
• CBS launches its web site.
• ESPN starts pitching advertisers on $1 million charter sponsorships of its site and other online properties.
• Yahoo! goes commercial.
• AT&T picks Modem Media as its interactive agency of record.
• WebConnect signs "First 100" member sites to its advertising network.
• Time Warner's Pathfinder signs its first advertisers, AT&T and Saturn. Ads cost $30,000 per quarter. ZD Net also begins to post ads.
• Interactive Traffic, an online media planning firm opens.
• Interactive Imaginations launches Riddler, a gaming site that incorporates marketer sites as clues.
• Internet Advertising Council convenes.
• Sun introduces Java programming language.
• Forrester Research reports that online ad spending will total $37 million for the year.
• InfoSeek and Netscape shift to a CPM model to sell Web Ads.
• Agency Poppe Tyson starts selling ad space for Netscape and Playboy.
• Microsoft launches Microsoft Network (MSN) online service.
• Kraft and Proctor & Gamble register 184 domain names on the Internet.
• ESPNET SportsZone signs advertisers to contracts totaling more than $1 million.
• Audit Bureau of Circulations starts testing audits of Web sites.
• Poppe Tyson spins off its Web ad sales unit as DoubleClick.

1996

• Microsoft pays $200,000 to sponsor the Super Bowl Web site.
• The New York Times launches on the Web with $120,000-per-year sponsors Toyota and Chemical Bank.
• Jupiter Communications estimates ad expenditures for January at $7.3 million.
• PointCast launches its "push" news and information network featuring animated ads.
• Sony Corporation of America announces it's looking for partners for its upcoming Sony Station Web site. Partners are to pay $500,000 to $1,000,000.
• Yahoo! allows Proctor & Gamble to pay for ads based solely on click-throughs rather than ad impressions.
• Juno Online Services launches a free, ad- supported e-mail service. Freemark Communications follows with a similar product.
• The Wall Street Journal launches its "Interactive Edition".
• iVillage receives $800,000 in ad commitments using an ad model that combines editorial with marketing.
• FocalLink Communications introduces Market Match Web media planning tool.
• Levi's Dockers division signs on for a one-year sponsorship of HotWired's Dream Jobs channel.
• AT& T launches its intermercial ad campaign which features animated banners.
• Poppe Tyson files for an IPO.
• Privacy advocates heighten industry awareness on potential invasiveness of cookie technology.
• General Motors doubles its web site content to more than 38,000 pages, making it one of the web's largest marketer sites.
• BackWeb Technologies introduces a private online broadcast system, with GM as one of the first users.
• The Coalition for Advertising Supported Information and Entertainment (CASIE) issues proposed guidelines for Web ad banners.
• In 1996, Companies spent $301 millions dollars in Web advertising. Consumers spent $1.3 billion on-line. And the number of households online reached 15.2 million.

1997

• Yahoo! makes $25 million advertising commitment to Netscape.
• Microsoft acquires Interse, developer of web site analysis software, to be integrated into BackOffice.
• The Internet Local Advertising & Commerce Association (ILAC), a not-for-profit organization designed to promote and facilitate local advertising and commerce between buyers and sellers on the Internet.
• Time Inc. New Media agrees to syndicate Pathfinder content on AT& T's World-Net.
• Microsoft announces plans to purchase WebTV.
• PointCast Inc. contracts with the Audit Bureau of Verification Services to perform the first-ever audit of traffic on its popular Internet broadcast service.

 

 

 

             
  back      top      next